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Ethereum Liquidation Charts Suggest That The Correction Could Deepen.
Recent data shows that long liquidations have been larger and more frequent than short ones, with several high volume spikes indicating excessive leverage on the long side. The most recent major long liquidation event followed a sharp price drop, forcing many leveraged positions to close. While short liquidations occur intermittently, they are typically less extreme, showing that the market is still dominated by leveraged long positions. Heavy long liquidations usually happen during fast downward price moves, accelerating the decline. After the recent long spike, price remained weak, with no strong recovery implying that the squeeze didn’t trigger renewed buying momentum. In contrast, when large short liquidations occur, price tends to jump rapidly upward. This pattern appears in the charts, where short squeezes coincide with upward rallies. The latest long liquidation likely triggered temporary selling pressure, pulling price lower. However, it also cleared out overleveraged longs, which could set the stage for potential dip-buying depending on subsequent volume and short liquidation behavior. If long liquidations continue while open interest declines and price falls to new lows, downward momentum could strengthen, potentially testing below $3.4k. Such conditions often increase volatility and funding rate swings. In the current setup, reducing leverage seems prudent, as the market remains long heavy and prone to sudden drops. Overall, the charts indicate that the long side is more exposed and riskier. The recent liquidation driven drop hasn’t been followed by a lasting recovery, suggesting that short term direction remains bearish.